THE AVENUE JULY 23, 2012
The nation is headed for a large scale cleantech subsidy pull-back, so it was gratifying to see our work on that and energy innovation referenced in David Leonhardt’s surprisingly optimistic essay on climate change mitigation in yesterday’s New York Times.
The piece provided a refreshing counterpoint to the gloom many in the climate community are feeling this summer given political gridlock, the summer’s insane weather, and the steady flow of carbon dioxide into the atmosphere.
According to Leonhardt, an investment-oriented, technology-driven push toward climate sanity is beginning to emerge and succeed, evidencing a transition to clean energy that “does not depend on the politically painful process of raising the price of dirty energy.”
His argument that stands in pointed contrast to the picture of our "almost-but-not-quite-finally hopeless" position in a warming world as depicted by Bill McKibben in this month's Rolling Stone. Where McKibben is dire and outraged Leonhardt is cheerful and optimistic. Leonhardt knows that a technology push could well fail given the scale of the problem but he sees “reasons for hope” that are tentative, yes, but “full of potential.” And I am with him on that. It’s a relief to see that view embraced.
With that said, however, I did want to add—as a fellow optimist—a few respectful complications.
First, the column is a bit too blithe, and narrow, in suggesting that the total of the needed technology-oriented agenda is the $25-billion-a year-or-more federal R&D investment target my group and others have been advocating for years now. While such a R&D level is necessary to finance research to bring down the costs of clean energy in the future, it will not be sufficient. Also needed are demanding procurement programs and smart public-private finance structures to help deploy clean new solutions and pull in and leverage private, low-cost capital to finance widespread adoption. And a low carbon price would help too!
Second, and perhaps most urgently right now, I am still wondering where the money is going to come from. For years I have been fretting about how the nation was going to fund such investments as the RD&D target. The slow and grudging funding of the Department of Energy’s Energy Innovation Hubs program has not inspired confidence. And now, the end of the Recovery Act’s research and deployment investments discussed in our “Beyond Boom and Bust” report raises the simple question tweeted by author Michael Grunwald: “What now?”
With overall federal cleantech support falling from a high of $44 billion in 2009 to $16 billion this year to $11 billion in 2014 it’s clear that the nation is already falling off the cleantech funding “cliff.” So, new arrangements need to be made to actualize a hopeful story.
Those could include a low carbon tax, a portion of the revenues of which should be dedicated to cleantech R&D and scale-up programs, or a version of the “all of the above” Republican energy plan of 2009 that would apply a sliver of the fees from fossil fuel exploitation to investments in cleantech. Others who worked on “Beyond Boom and Bust” favor a new brand of time-delimited, performance-oriented declining subsidies, while my group here at Brookings has become increasingly interested in sub-national solutions such as states taking the lead in the development of clean energy.
Early this year we collaborated with Lew Milford of Clean Energy Group on a paper reviewing the accomplishment of state clean energy funds and noting their further potential for accelerating the development of robust clean energy industries in states. And soon we will publish a paper suggesting that state clean energy finance banks (aka state “green” banks) hold out promise for helping to leverage scarce public resources with private-sector financing. Both these papers point to the increasingly important role that states are now playing in clean energy development.
In any event, no shortage of ideas exists for ensuring the nation can deliver on climate optimism. But we really do need to start focusing.